How does the car insurance franchise work?
Verified 10 January 2020 - Directorate for Legal and Administrative Information (Prime Minister)
The deductible is the amount that remains at your expense after a claim is compensated by the insurer. It is therefore not reimbursed by the insurer. Its application is not automatic, it must be provided by the insurance contract. The contract must specify, for each situation, how the franchise is calculated and whether it is a relative franchise or an absolute franchise.
Depending on the contract, the deductible may be relative or absolute.
Franchise relative or simple is the one that determines the insurer's intervention, based on the amount of the claim.
If the amount of the claim is less than the deductible, you will not be compensated.
But if the amount of the claim is greater than the deductible, you will be fully compensated.
For example, if the deductible is €150, you will receive nothing if the claim is €100.. However, for a disaster €200, you will be reimbursed in full.
The absolute deductible is the deductible that the insurer systematically deducts from your claim.
For example, if the deductible is €150 and that the disaster €100, you will not receive anything. If the claim is €200, only the difference €50will be paid to you.
There are different ways of calculating the deductible:
- a fixed sum in euro (e.g. €150),
- a percentage of the amount of compensation,
- a combination of a fixed amount and a percentage (e.g. 10% of the allowance, with a maximum of €300).
If the disaster is caused by a natural disaster, the amount of the deductible shall be €380..
if the vehicle is for professional use, the deductible applied shall be that indicated in the contract, if the latter is higher.